Peters & Co. Limited Energy Conference January 28-30,

Transcription

1 Peters & Co. Limited Energy Conference January 28-30, 2009

2 Oil Sands are Big $30 $28.8 $25 US$ Trillions $20 $15 $10 Potential $19.7 $9.7 $5 $4.0 $0 Proven Oil Sands US Real Estate US Stock Market World Gold Supply $0.2 Fort Knox Supply All North America s needs for ~23 years from proven reserves ~225 years from potential resources 2

3 Mr. Heavy Oil is not Pretty CO 2 Intensity Feedstock to Fuel Saudi Heavy 169 Kg / bbl Bitumen 264 Kg / bbl 3

4 The world hates CO 2, therefore the world hates oil sands 4

5 CO 2 : The Key to Alberta s Fort Knox 5

6 Alberta has Two Magic Bullets COKE EOR 6

7 Infinite COKE and Heavy Bottoms Bottom 20% of a heavy barrel has zero value Can be gasified into fuel, hydrogen and PURE CO 2 7

8 EOR Potential >1 Billion Barrels CO 2 at low cost is the missing ingredient Costs set by purity and proximity CO 2 permanent storage with EOR ~ 2 billion tonnes Pays for infrastructure, lower cost pure sequestration to follow Edmonton Calgary Alberta s geology is the key to effective CO 2 management 8

9 EOR Provides the CO 2 Solution CO 2 Emissions Intensity Source: Industry reports SAGD Bitumen with Gasification and EOR Saudi Light Arab Heavy SAGD Bitumen 9

10 So, What s the Problem? No pure CO 2 No infrastructure No money Fractured ownership of best reservoirs 10

11 CO 2 Most of Alberta s CO 2 made by burning and reforming Burn = Contaminate CO 2 with nitrogen 15:1 Capital decisions were made in a pre CO 2 world The rules have changed: Bottoms gasification a cheaper way to make hydrogen Especially in Alberta where bottoms are free 11

12 Infrastructure Needs new pipelines from sources to fields High MOP 2600 psi It s a long way to the best fields Compression is expensive and energy intensive 12

13 Available CO 2 Supply Pure CO 2 Contaminated CO 2 13

14 Economic Continuum of CO 2 Sources $40/ tonne $150/ tonne New Upgraders (H 2 from gasification) >95% Purity Agrium (Older SMRs) New & Old Upgraders (H 2 from natural gas) >90% Purity Ft. McMurray (Newer SMRs) Gas Processing 15-90% Purity Geographically scattered Power Plants & Industrial <15% Purity Central Alberta 14

15 Money Big projects Enhance s first phase is >$500 million Long life production but slow to come on line Engineer, develop and time to reach production takes 7+ years for first projects Lead times will shorten as infrastructure evolves Even more challenging in the current world 15

16 Fractured Reservoir Ownership Bottlenecks Experience & Staff CO 2 supply and capital cost uncertainty Differing financial capacity of owners 16

17 What is Enhance Doing? Alberta s first CO 2 trunk line Executing EOR projects at Clive and Bashaw Our objective: Catalyze development of integrated oil sands and EOR CO 2 solutions Recover 1 billion barrels of EOR oil in Southern Alberta Permanently store 1-2 billion tonnes of CO 2 Enable environment friendly bitumen to fuels; billion barrels Infrastructure for economic pure sequestration 17

18 Enhance ACTL System Alberta Carbon Trunk Line Capture all CO 2 in Heartland 240 km 16 diameter (phase 1) Capacity: 40,000 T/d,14.6 million T/yr Sufficient CO 2 capacity for 80k bpd EOR Fairborne Energy EOR JV Fairborne Clive project Central Alberta EOR projects Bashaw project 18

19 Worldwide CCS Projects Active Projects Proposed EOR Proposed Non-EOR CO2 Sequestered; Millions of Tonnes per Year Enhance Monash Energy Gorgon Sargas Husnes Statoil Mongstad Weyburn ZeroGen RWE Zero CO2 HECA UAE Project Scottish & Southern AEP Northeastern In Salah Quest Naturkraft Kårstø Entrada Sleipner Cranfield Antelope Valley WA Parish Williston Fort Nelson Snohvit Decatur TAME Kimberlina K12-B Callide-A Oxy AEP Mountaineer Otway Total Lacq Schwarze Pumpe Zama Jofree Ketzin Boundary Dam Wallula Energy GreenGen ACTL will be the largest CCS project in the world 19

20 Enhance Energy Inc EOR experts Weyburn and Pelican Lake Designed, managed and implemented by Enhance team Spent last 4 years Contracting all economically viable CO 2 Completing engineering Preparing regulatory application Expect non objection regulatory application First project that has all the ingredients Pure, reasonable cost CO 2 Economic proximity to reservoir Concentrated reservoir ownership 20

21 Weyburn: Analogue for Alberta Weyburn Production bbl/d Incremental recovery 150 MMbbls Sequestration 30 million tonnes CO 2 50,000 40,000 30,000 20,000 10,000 Water Flood Primary Production Horizontal Drilling Infill Drilling CO 2 Flood

22 CO 2 and Alberta s Industrial Heartland Agrium North West Upgrading Shell Scotford II Statoil Total PetroCanada Fort Hills Suncor Sherritt EPCOR TransAlta Ft. McMurray Edmonton Calgary 22

23 Delays in Heartland Upgraders BUT: Integrated CO 2 management makes Alberta oil sands: Green Secure Friendly Alberta has the most cost effective CO 2 option Gulf Refiners can t match it The New Alberta Advantage Alberta Upgraders will go when US CO 2 costs are known 23

24 Enhance: CO 2 Solution for Bottoms 90,000 80,000 CO2 Rate Tonnes/D 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Pipeline Capacity with pumping 40,000 T/d Base Pipeline Capacity 25,000 T/d Existing Heartland Planned Heartland Total Power 40,000 T/d results in > 80,000 bbl/d of EOR oil production 400,000 bbl/d of Clean bitumen to fuels 24

25 Clive and Bashaw Anchor Projects Vertical floods Oil-in-place 170 MMbbls Incremental recovery 25 MMbbls Sequestration potential: 15 million tonnes Detailed engineering complete Regulatory applications Q2/09 25

26 Oil Sands Integrated EOR North America s Energy Future Effective CO 2 management Known standards that are enforced Secure Friendly Recycle cash flow 26

27 We re in it Together 27

28 Ian MacGregor Chairman